Expect Cheaper Electric Bills This Summer

Americans’ electric bills are expected to shrink this summer, putting a few extra bucks in their pockets as they beat the heat.

The average U.S. household will pay $395 for electricity in June, July and August, a 2.5% decrease from last summer’s bill, the U.S. Energy Information Administration said Tuesday. If the projection holds, it will be the third consecutive summer where spending on electricity declined.

The relief this summer, however, is due to expected cooler temperatures, rather than cheaper rates. Government weather forecasters predict that summer 2013 temperatures will be much closer to the average levels after three scorching summer in a row.

That will allow households to dial back on cooling, causing a 4.6% decline in average usage.

Electricity use during the summer months is highly sensitive to temperature due to the prevalence of air conditioning in the U.S., EIA report said. In 1993, only 68% of homes had air conditioning equipment. That figure rose to 87% by 2009.

Declining usage this summer will help offset higher prices.

Average U.S. energy rates are expected to increase 2.2% from a year ago. The rising price reflects an increase in fossil fuel costs since the recession ended in 2009. Due to state regulations, it can take several years for higher fuel prices to translate to consumer bills.

Still, lower overall bills aid consumers whose budgets have been limited by higher payroll taxes and minimal wage increases. Many economists credit lower gasoline prices, which were down 4% in May from a year earlier, for spurring consumer spending despite other economic headwinds.

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